Market brief — November 2, 2026

In 30 seconds

• On Friday, October 30, technology stocks led a broad sell-off: the Nasdaq fell 2.86% and the S&P 500 lost 1.82%.^[1]
• Investors questioned whether massive artificial-intelligence spending will generate enough cash and profit.^[2]
• The next few sessions may favor defensive shares, although mixed market breadth argues against calling a full market breakdown.

Last session’s figures

• CAC 40: 7,969.42, down 0.01%; broadly unchanged.
• Euro Stoxx 50: 6,131.31, down 1.22%; European shares weakened.
• DAX: 25,818.21, down 0.85%; German stocks followed the decline.
• S&P 500: 7,580.07, down 1.82%; technology drove the retreat.^[1]
• Nasdaq: 25,437.00, down 2.86%; the sharpest major-market decline.^[1]

These are Friday’s closing levels, not Monday’s live prices. A weekend separated that session from the start of the new week.

The day’s main subject, explained

The central issue remains the cost of the artificial-intelligence investment boom. Major technology companies, including Alphabet, Amazon, Meta, Microsoft and Oracle, are expected to spend about $800 billion on artificial intelligence in 2026.^[3] Recent results showed strong investment, but investors saw weaker cash generation and less convincing revenue growth.

The mechanism is simple: when a company spends heavily before the return is visible, shareholders need proof that future profits will justify the cost. It resembles borrowing to expand a shop before knowing whether enough customers will arrive. If sales disappoint, the investment looks less attractive and the share price can fall.

The analysis of the day

Friday’s decline was concentrated in technology but was large enough to affect the wider market. The Nasdaq fell much more than the S&P 500, showing that the most expensive and artificial-intelligence-sensitive shares carried much of the damage. Intel fell sharply after weaker guidance, while Alphabet and Amazon also faced concerns about spending and cash generation.^[1][4]

The market scanner gives a more mixed picture. Only 46% of tracked shares were above their 50-day average, but 52% remained above their 200-day average. That combination suggests short-term weakness inside a still-partly intact longer-term market. It does not support a simple “everything is falling” interpretation.

Defensive and health-related shares appearing among the strongest scanner signals reinforce the rotation away from technology. Altria Group and Exelon showed strong technical readings, while Exelixis, Gilead Sciences and Pfizer also appeared near recent highs. However, scanner strength is not proof that company earnings will improve.

The most likely near-term scenario is continued volatility, with investors testing whether technology earnings can support the spending plans. A stabilization would be more credible if the Nasdaq stopped making new lows and future results showed improving cash generation. The scenario would weaken if further technology companies reduced guidance, or if the S&P 500 fell decisively below its recent support area. No such confirmation is available from the supplied data.

Word of the day

Market breadth measures how many shares participate in a market move. If an index rises while only a few large companies advance, breadth is weak; here, the mixed averages suggest uneven participation.

What the scanner sees

• Altria Group (MO): Tobacco. The share price moved above its highest level of the past 20 sessions, with rising volume and a strong trend signal. This supports the defensive rotation, not the artificial-intelligence theme.
• Exelon (EXC): Utilities. The scanner detected a 20-session high, rising volume and a strong trend. Utilities often attract interest when investors reduce exposure to more volatile growth shares.
• Exelixis (EXEL): Biotechnology. The share price exceeded its recent 20-session high, with a 4.8% gap and increasing volume. Its exceptional score confirms that strength is spreading beyond technology, although the supplied sources do not explain the move.

The scanner identified 76 opportunities among 4,154 shares. Its sector mix therefore points to selective strength rather than a broad reversal.

The agenda

• U.S. midterm-election developments: Political uncertainty may affect expectations for regulation, taxation and public spending.^[2]
• Further technology earnings and guidance: New comments on artificial-intelligence investment could either calm or extend the sell-off.^[1][3]
• European Central Bank publications: The bank’s weekly calendar includes Monday, November 2, but the supplied calendar does not identify a major decision for that day.^[5]
• Market reaction to bond and currency moves: A shift toward safer assets could pressure growth shares further, while stabilization could help technology recover.^[1]

To watch

• A further reduction in technology-company guidance would strengthen concerns about weak returns on artificial-intelligence spending.
• A widening decline beyond technology would challenge the current interpretation of a sector rotation.

Key figure: The Nasdaq fell 2.86% on Friday, showing that doubts about artificial-intelligence spending had become a market-wide valuation risk, not just a company-specific concern.